Work & family · Jurisdiction DE

Early retirement deductions

Someone who draws an old-age pension before the relevant age receives a deduction. It reduces the pension on a lasting basis through the access factor.

In more detail

As of the text of Social Code Book VI section 77: for an old-age pension claimed early, the access factor is 0.003 lower than 1.0 for each calendar month. That is 0.3 percent of the pension calculated this way, per month. The deduction is not a tax withholding. Which age applies to which type of pension is a different rule. Finmon does not say whether an early start fits.

Background

German statutory pension insurance shows the deduction in its procedure. One month more or less changes the factor. After the standard pension age, a later start can raise the factor by 0.005 per month. That is the supplement in the same section, not a recommendation to wait. The pension insurance is the place for your own start date.

An example

Someone claims the old-age pension twelve calendar months before the relevant age. The access factor is then 12 times 0.003 below 1.0, that is 0.036 lower. That is 3.6 percent less on the personal earnings points calculated this way. Whether this person may claim early is not in Finmon.

A common misconception

The deduction applies for one year only and then disappears.

It lowers the access factor and therefore the pension on a lasting basis. It is not a one-off tax deduction.

Source: SGB VI § 77. Last reviewed: 2026-10-29. Editorially reviewed on 2026-10-29. Next review 2027-10-29. Version 0.2.0. Finmon explains. It does not advise. Not investment, tax or legal advice.